DocketNumber: Appeal, No. 122
Citation Numbers: 177 Pa. Super. 576
Judges: Ervin, Gunther, Hirt, Recodes, Ross, Woodside, Wright
Filed Date: 3/24/1955
Status: Precedential
Modified Date: 2/18/2022
Opinion by
The plaintiff, Radio and Motor Service Inc., brought this action in equity to enjoin the City of Altoona from collecting a mercantile tax.for the year 1952. This tax was levied by the city under an ordinance enacted on the authority of the Act of June 25, 1947, R. L. 1145, 53 PS §§2015.1-2015.8. The Act authorizes certain po
On March 16, 1948, Altoona, a city of the third class enacted its Ordinance No. 3359, levying an annual mercantile tax “upon all persons, firms, companies and corporations engaged in wholesale or retail vending of goods, wares, and merchandise.” The ordinance, later amended, divided the persons subject to the tax into three classes as follows: (1) Wholesale and retail vendors or dealers, who had been in business for the entire preceding year, were taxed at specified rates based upon the total gross business transacted during the previous calendar year; (2) Dealers who had been in business less than one full year were taxable on the basis of the gross volume of business for the first month in which they were engaged in business, multiplied by twelve. (3) A taxpayer who embarked in business during the tax year was required under the ordinance to compute his tax on the gross amount of business transacted during the first month, multiplied by the number of months remaining in the calendar year. Radio and Motor Service, Inc., is within the first classi
In Allentown Sch. Dis. Mer. Tax Case, 370 Pa. 161, 167, 168, 87 A. 2d 480, the Resolution of the School District was not dissimilar in pattern from the ordinance in the instant case. It divided wholesalers and retailers into four different classes: “(a) persons who have commenced business at least one full year prior to the fiscal year commencing July 1, 1951; (b) persons who have commenced business less than one full year prior to the fiscal year commencing July 1, 1951; (c) persons who commence business subsequent to July 1, 1951, or any succeeding tax year, and (d) persons who are engaged in a temporary, seasonal or itinerant business.” And in referring to this classification provision of the Resolution, the Supreme Court speaking through Mr. Justice Bell said: “Article IX, section 1, of the Constitution of Pennsylvania, provides, ‘All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws; . . .’ This means that the classification by the legislative body must be reasonable and the tax must be applied with uniformity upon similar kinds of business or property and with substantial equality of the tax burden to all members of the same class: Commonwealth v. Girard Life Insurance Co., 305 Pa. 558, 158 A. 262; Knisely v. Cotterel, 196 Pa. 614, 46 A. 861;
In Goldstein v. Pittsburgh School District, 372 Pa. 188, 93 A. 2d 243, the principles of the Allentown Seh. Dis. Mer. Tax Case were reaffirmed. These principles control the disposition of the present appeal. The vice of the ordinance in question is not the computation of the tax on an estimated basis
Although not essential to the disposition in this appeal, in the light of the controlling constitutional question, it must be noted, that the ordinance is defective also in that it does not comply with the provisions of Section E(b) of the enabling Act. That section of the Act provides: “No such tax shall be levied on the dollar volume of business, transacted by wholesale and retail dealers derived from the resale of goods, wares and merchandise taken by any dealer as a trade-in or as part payment for other goods, wares and. merchandise, except to the extent that the resale price exceeds the trade-in allowance.” In Allentown Sch. Dis. Mer. Tax Case, supra, the Resolution of the School District, levying a mercantile tax under the same enabling Act, ignored the above prohibition and by its language specifically taxed dealers on gross volume of business with
Decree affirmed at appellants’ costs.
The question involved in this appeal is moot except for the single year 1952. After the final decree in this case the ordinance was repealed, and a new ordinance was enacted by the City of Altoona, applicable to the year 1953 and all subsequent years. The new enactment was patterned after the ordinance of the City of Pittsburgh, which had been upheld in Goldstein v. Pittsburgh School District, 372 Pa. 188, 93 A. 2d 243.
In the light . of the historical background of mercantile license taxes,, it was held in the Goldstein case, p. 197: “. . . that the enabling Act [supra] does not prevent a city from levying a mercantile tax computed in Some cases upon an estimated basis, as distinguished from the actual gross volume of business in the current, year.”